Angus Energy a small company with a bright future

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Angus Energy PLC said Monday 14th November 2016 that it has received permission from the UK Environment Agency to drill a side-track well at its Brockham production oil field in Surrey, after the company was admitted to trading on London’s AIM market.

The Angus Energy LON:ANGS

2009 the company was founded, the following year they qualifies as a UK O&G Operator. Jump forward to 2014 and the group acquired Brockham and Lidsey Oil Field Acquisition.

In 2015 Horse Hill Development Ltd. (HHDL) was founded by Angus Energy with Partners brought in to fund drilling of Horse Hill – 1 exploration well.

The Horse Hill-1 exploration well (less than five miles to the southeast of Brockham) was drilled and delivered on-time and on-budget by Angus Energy as the operator, partners. The group (Horse Hill sisters), which was behind the exploration at Horse Hill generated dramatic headlines in April 2105, with claims of a huge oil find near Gatwick airport

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Source:Reuters  

UK Oil & Gas, the largest investor in the site, said up to 100 billion barrels could lie under the area. However, the amount that could be extracted is yet to be proven with further drilling planned in 2107.

Angus Energy, one of the companies exploring for oil in the Home Counties, had its own plans and was planning to join the junior AIM market back in late 2015, hoping to raise millions of pounds to expand its drilling operations in Surrey and Sussex.

This is a onshore, UK-based oil and gas company that is focused on production and development. Angus Energy holds a 50% interest in the Lidsey licence PL 241 and a 40% working interest in the Lidsey-2 well.

Brockham and Lidsey Oil Field was always the prize and with their junior market listing, could they beat Horse Hill to the finish line in this race to get oil to market?  Or will both benefit from the Weald Basin attention.

Source:  ProactiveInvestors Stocktube
Published on Nov 14, 2016; Angus Energy (LON:ANGS) made its AIM debut Monday having raised £3.5mln and is a junior with some big plans.Proactive’s Andrew Scott recently caught up with managing director Paul Vonk from the firm, which has interests in two recently producing oilfields in southern England.

Angus Energy were looking to expand their existing wells at Brockham, near Dorking, in Surrey, and in the Lidsey oil field near Bognor Regis, in West Sussex. Now they have the chance perform a side-track at Brockham-1 and drill a new horizontal well on the other licence, Lidsey, in West Sussex.

In drilling the side-track at Brockham, Angus will drill the Portland sandstone zone, host to a known oil play that is already generating 35 barrels a day. The Kimmeridge is the main target to prove on Brockham, if the geological structure replicates the well at Gatwick (Horse Hill-1) that produced 1,688 barrels a day.

brockham

Source: Xodus Group Ltd (“Xodus”)

No one is saying that Brockham will have identical geology to Horse Hill – but one of Angus’ partners, Doriemus, have commissioned the consultant Nutech to make a comparative analysis of the Horse Hill-1 well and Brockham-1, sunk by BP back in 1987.

It is too early to definitively assert this, but Angus believes the maturity and fracture analysis of the two have striking similarities.

We’ll find out soon – once Brockham receives the sign off from the powers that be at the Health & Safety Executive, Oil & Gas Authority and Environmental Agency.

‘We know we have these limestone layers, they appear to be naturally fractured and the maturity is slightly better than Horse Hill,’ says Angus managing director Paul Vonk.

Something else to take into consideration when looking at Weald Basin;  

Brockham is permitted for production with three wells already drilled. So, unlike Horse Hill, it could be put onto production immediately as it has already produced from previous drills. Angus could drill from the same pad to carry carry out directional drilling as required. Realistically the company is looking at 7-10 day drill with the well already cased,  It will talk time to fit the BOP (Blowout preventer) on the turn table and drill pipe on site to start operations.

bop-pic

The evaluation of the zones is likely to take a number of weeks, maybe longer as the drill team will want to take a good look at the core samples, mud samples results if the company are to unravels the mystery of the Kimmeridge zone.

Horse Hill was drilled first(less than five miles to the southeast of Brockham) as an exploration well and no one would dispute that It require further testing, field development and council, government planning approval before commercial production can take place. As we know that will take some considerable time to achieve with the red tape the UK governmental departments put in place. It is not flippant remark when i state Angus and Brockham could beat Horse Hill to the punch in this race to get oil to market.

IPO presentation 

Angus Energy plc  LON:ANGS raise cash to expand existing wells at both Brockham and Lindsey oil field. Angus Energy made its AIM debut having raised £3.5 million – but it arrives on the junior market with a bright future.

Admission and First Day of Dealings 

Jonathan Tidswell-Pretorius, Angus Energy’s Chairman, commented: “Today marks an important milestone in the development of Angus Energy. With existing cash resources and today’s placement proceeds, we now have sufficient funds to undertake the drilling programme at Brockham and Lidsey. Significantly, as an OGA approved operator and with two production licences for these fields, we are able to undertake this programme with the expectation that the additional production can be bought on line shortly after drilling is completed. We look forward to updating the market as the results of this drilling become available.”

Angus Energy and its subsidiaries (together the “Group”) operate a UK onshore focused oil and gas business with majority interests in two production oil fields in the UK Weald Basin in southern England with development and exploration upside. The Group is an OGA approved operator and owns a 55% interest in the Brockham oil field in Surrey in PL235 and a 50% interest in the Lidsey oil field located in West Sussex in PL241. The Weald Basin is a proven petroleum system with several commercial producing fields and discoveries.
The Company has raised £3.5 million (gross) in conjunction with Admission to fund its share of the costs of phased development programmes on the Brockham and Lidsey fields. 
Further details can be found on the Company’s website http://www.angusenergy.co.uk/ 
Summary of the placing
·     The placing raised £3.5 million (gross) at a price of 6 pence per ordinary share (the “Placing Price”) to fund its share of the costs of phased development programmes on the Brockham and Lidsey fields targeting the Portland Sandstone formations as well as, at Brockham, the extension into the lower Kimmeridge Limestone formation.
·     The number of ordinary shares in issue immediately after admission will be 214,980,287 giving the Company a market capitalisation of £12.89 million at the Placing Price.
·     Beaumont Cornish Limited is acting as Nominated Adviser and Optiva Securities as Broker to the Company.

Angus Energy: Major shareholders

Angus currently has 150.0 million shares in issue, all of which are held by Directors of the company and associated individuals and entities: The major shareholders are as follows:

Shareholder Interest (%)
Knowe Properties ltd 22.2%
Jonathan Tidswell 19.2%
JDA Consulting ltd 14.6%
Paul Vonk 7.3%
Others 36.7%
Total 100.0%
Source: Angus Energy

The Brockham oil field

The Brockham oil field is located on licence PL 235 in Surrey (see below) which covers 8.9 km2 (3.44 square miles). The field was discovered by BP in 1987 with the drilling of the Brockham-1 well. Angus Energy currently holds a 55% interest and operatorship of the licence.

The field has been shut in since late February 2016 in order for the completion of surface upgrades to make the production facility compliant with future regulatory requirements and to prepare the site for future drilling activity. Prior to shut-in, the field was producing approximately 20 bopd from the Brockham-2Y well over 2015. The field produces from a historically drilled off-structure well where production is realised via an acidized pathway through the overlying limestone reservoir seal. This suboptimum solution is the primary rationale behind Angus’ strategy to drill a side-track well to the BR-X4 well to target the crest of the Portland Sandstone reservoir and access significantly greater volumes of oil. This well will be termed BR-X4Z.

Current equity partners in licence PL 235

Company Interest
Angus Energy (operator) 55%
Terrain Energy 20%
Doriemus 10%
Brockham Capital Ltd (BCL) 10%
Alba Minerals 5%
Source: Angus Energy

Location of the licence PL 235 (Brockham field)

xodus

Source: Xodus Group Ltd (“Xodus”)

Existing production reservoir – the Portland interval

The current producing reservoir of the Brockham field is in the Upper Jurassic Portland Sands, a common reservoir type in the Weald Basin. The fine grained sands were deposited in a shallow marine shelf environment and are composed of a sequence of four regressive and transgressive cycles. The cycles are separated and defined by minor flooding surfaces.

Correlation in the Portland Sandstone

angus-energy

Source: Xodus Group Ltd (“Xodus”)

Portland drilling history

Brockham has had several wells drilled on the field. The first well, BR-X1, originally targeting deeper formations, was worked over to allow production from the Portland Sandstone shortly after the original discovery. Initial production from the well was 95 bopd with only 5 bbls of associated water and associated gas.

Further wells and side-tracks were drilled after 1988. These include BR-X2, BR-X2Z, BR-X2Y, BR-X3 and BR-X4. A horizontal well, BR-X2Z was also drilled on the field. These wells, although geological successes, encountered technical problems due to limited formation information available at the time. Openhole completions on the horizontal wells combined with water fractures resulted in these wells being unable to produce for a prolonged period from the targeted zones. The BR-X4 well did penetrate the 4.2 unit within the Portland and showed the best permeability and porosity. However, the horizontal well passed through a fracture connecting to higher pressure water zones beneath.

Acquisition by Angus Energy

Angus Energy acquired the Brockham field in 2012 and started a programme of logging the old wellbores. The company also acquired and reprocessed an additional 46 km of seismic across the field. A field remapping study was then undertaken and a new Field Development Plan was submitted to the government’s Oil and Gas Authority (OGA).

To date, Brockham has produced approximately 230,000 barrels of oil. Based on the company’s additional analysis and better understanding of the formation, reservoir, high pressure water zone and fractures, Angus believes that there is major production upside potential to be derived from completing a relatively simple up-dip side-track mirroring the BR-X1 well. This would target the 4.2 unit at an angle of approximately 30 to 40 degrees and stay away from any problem-causing fractures.

A working petroleum system

The Weald Basin is a proven petroleum system with several commercial producing fields and discoveries, mostly on the flanks of the basin. Since a raft of modest discoveries in the 1980s, there has been modest yet steady production from oil fields including Horndean, Singleton and Storrington as well as Lidsey and Brockham as discussed in this report. There are also several gas field located towards the central area of the basin. These fields are evident on the map below.

Oil (green) and gas (red) fields of the Weald Basin and the wider region

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Source: Alba Minerals

Source: Optiva Securities Limited 

“The views expressed are the author’s own and all readers should do their own research and seek appropriate financial and regulated stockbroker advice.”

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